COLUMBUS, Ohio (WCMH) — A study of legal marijuana growers shows that banks are still wary of accepting their deposits or loaning them money.

A team of researchers from Ohio State University and University of California, Davis, looked at the way banks and marijuana growers are still not interacting.

“It’s clear we need policies making cannabis banking and finance more equitable,” Keith Taylor of UC Davis and one of the study’s authors said. “It’s also clear that ‘Ma and Pa’ enterprises need to associate together in formal organizations so they can achieve economies of scale and harness their political power to endure the transition to legal.”

Marijuana is worth more than almonds and dairy combined to the California economy, making it the most valuable crop. Outsiders who can get their operations funded are out-competing California growers who have lived there for generations, the study’s authors observed.

“Licensed cannabis businesses need to bank their cash and take out loans to build their businesses, but many banks worry that by doing business with the cannabis industry, they’ll be flouting federal laws,” said Taylor, who is a University of California Cooperative Extension community development specialist.

“Banks that won’t accept legal cannabis cash deposits and don’t provide loans aren’t monetizing their deposits. Marginalized cannabis communities are missing out on capital.” 

Of the banks and credit unions contacted by the researchers, most were not knowingly involved in the cannabis industry. Bankers reported being hamstrung by ambiguous federal guidelines that pose a real risk to financing cannabis, largely because banks are required to report suspicious transactions to the federal government, the researchers said in a news release.

Marijuana is listed as a Schedule 1 drug under the federal Controlled Substances Act. Even in states that have legalized recreational and medicinal use of cannabis, it is still a federal crime to possess, buy or sell marijuana. California legalized recreational cannabis for adults in 2016, and the industry is overseen by the Department of Cannabis Control.

Financial institutions might be seen as players in a criminal enterprise even by providing banking services to employees who work for licensed members of the cannabis industry, or they could lose big on lending if cannabis-related assets backing a loan were seized by federal agents, the release said.

The research is published online in the journal Agricultural Finance Review.